FCC to Verizon: what’s wrong with that spectrum you never built out?

Verizon wants to sell spectrum it never bothered to use, and buy some more.

The Federal Communications Commission wants Verizon Wireless to explain why it never deployed cellular services in spectrum that it acquired four years ago and is now trying to sell off in order to get a better chunk of spectrum for its 4G-LTE network.

Verizon is trying to buy $3.6 billion worth of spectrum in the Advanced Wireless Services (AWS) band from a consortium of cable companies in a deal that requires FCC approval and has drawn antitrust concerns from competitors. To make that purchase more palatable to regulators, Verizon is proposing to sell off many of the Lower 700MHz licenses it bought in an FCC auction in 2008, and has made the sale contingent on approval of its new purchase.

The FCC sent Verizon Wireless a letter (PDF) yesterday noting that Verizon has yet to deploy services in the Lower 700MHz band, and asked what steps, if any, Verizon took to build out the spectrum. The FCC also asked Verizon to describe what challenges it faces in the 700MHz band and explain the relevance of the 700 MHz sale to its pending purchase of AWS spectrum. "What steps to date, if any, has Verizon Wireless taken to deploy mobile services using the Lower 700 MHz A or B Block licenses (either of both)?" the FCC asked. "Would Verizon Wireless abandon its plans to sell its Lower 700 MHz licenses if the Commission does not consent to the sale of all of the AWS licenses at issue to Verizon Wireless?"

Back in 2008, Google warned the FCC that it should force Verizon to honor the 700MHz spectrum's open access requirements, which call on network operators to let consumers use any device or application on the network—not just Verizon's. The FCC didn't mention this provision in its letter, but by swapping spectrum, Verizon would gain the benefit of ditching a provision meant to ensure wireless competition and consumer choice. The FCC did mention that Verizon has only until June 2013 to build out the 700MHz spectrum or face a reduction in its license term. CORRECTION: The open access rules apply only to the Upper 700MHz spectrum, not the Lower 700MHz spectrum at issue here.

Verizon has claimed its purchase of new spectrum will help it meet "consumer demand for wireless services and bandwidth," and that the sale of 700MHz will help "rationalize its spectrum holdings." The FCC showed its willingness to preserve competition in the cellular industry when it blocked AT&T's attempt to purchase T-Mobile, and is displaying a healthy dose of skepticism toward Verizon's spectrum deals. Verizon will have to provide some good answers about its use of old spectrum if it is to get those new airwaves it so desperately wants.

Promoted Comments

The only 700MHz band with open-access requirements is the Upper 700MHz "C" block. This is where Verizon is rolling out their LTE footprint now.

The lower 700MHz band (blocks A,B,C,D,E) do not have this restriction on them. Therefore, if Verizon gets rid of them, they aren't going to be ditching any open access requirement, just the 2013 build-out requirement. The "B" blocks will go to AT&T, and the "A" blocks to US Cellular where they have coverage, and to other minor players (MetroPCS) elsewhere.

That said, Verizon hasn't done anything with the spectrum because there aren't RF amplifiers necessary to do both lower and upper 700MHz bands. And the "A" block has ch 51 TV interference issues.

As mentioned in the article, the 700MHz spectrum was sold to Verizon with open access requirements. I assume the AWS band does not carry these requirements as they are currently owned by some cable companies.

The cynical side of me says that the primary reason they want to dich the 700MHz block is because of the open access requirements attached to the license. Other than that there probably isnt' a *technical* reason per-se. But I'm not an expert by any stretch of the imagination.

Once Verizon responds with their rationale (which I am dubious will be true), I'd like to see the FCC say "Fine, we'll approve this with the caveat the open access restriction transfer from the 700MHz block to to this newly acquired spectrum. Since you didn't mention that as an issue, that will be fine, right?"

The cynical side of me says that the primary reason they want to dich the 700MHz block is because of the open access requirements attached to the license. Other than that there probably isnt' a *technical* reason per-se. But I'm not an expert by any stretch of the imagination.

Once Verizon responds with their rationale (which I am dubious will be true), I'd like to see the FCC say "Fine, we'll approve this with the caveat the open access restriction transfer from the 700MHz block to to this newly acquired spectrum. Since you didn't mention that as an issue, that will be fine, right?"

Well, this also seems like Verizon was squatting on the 700MHz band if they've done nothing to develop it, but prevented anyone else from doing so as well. If they don't do anything it should just revert back to government ownership for a new auction, with no need to reimburse Verizon anything. They knew the stipulation at time of purchase, but figured that was just going to take offering a position to an FCC head to get that portion rescinded.

I'd love to see what the terms of the 2013 limit are-how much build out is needed to before the term is shortened.

Wouldn't 700MHz be better at penetrating buildings and long distance coverage over the higher frequencies (at the expense of lower throughput I guess)?

Once Verizon responds with their rationale (which I am dubious will be true), I'd like to see the FCC say "Fine, we'll approve this with the caveat the open access restriction transfer from the 700MHz block to to this newly acquired spectrum. Since you didn't mention that as an issue, that will be fine, right?"

not to troll VZW, but it seems like they ordered the spectrum and sat on it in order to prevent all of this openness and consumer choice business that it represented. I feel like this country needs to be reminded en masse that this is a country for the people, by the people (no i'm not joking, it really is supposed to be that way in the US, despite what it looks like) and that the people are consumers who demand choice.

Once Verizon responds with their rationale (which I am dubious will be true), I'd like to see the FCC say "Fine, we'll approve this with the caveat the open access restriction transfer from the 700MHz block to to this newly acquired spectrum. Since you didn't mention that as an issue, that will be fine, right?"

Agreed. Where's the +1 button for posts? I thought I read somewhere that's a new Ars feature. Maybe it's still en route.

not to troll VZW, but it seems like they ordered the spectrum and sat on it in order to prevent all of this openness and consumer choice business that it represented. I feel like this country needs to be reminded en masse that this is a country for the people, by the people (no i'm not joking, it really is supposed to be that way in the US, despite what it looks like) and that the people are consumers who demand choice.

not to troll VZW, but it seems like they ordered the spectrum and sat on it in order to prevent all of this openness and consumer choice business that it represented. I feel like this country needs to be reminded en masse that this is a country for the people, by the people (no i'm not joking, it really is supposed to be that way in the US, despite what it looks like) and that the people are consumers who demand choice.

Legal entities like corporations are people too, according to a majority of the the supreme court.

The only 700MHz band with open-access requirements is the Upper 700MHz "C" block. This is where Verizon is rolling out their LTE footprint now.

The lower 700MHz band (blocks A,B,C,D,E) do not have this restriction on them. Therefore, if Verizon gets rid of them, they aren't going to be ditching any open access requirement, just the 2013 build-out requirement. The "B" blocks will go to AT&T, and the "A" blocks to US Cellular where they have coverage, and to other minor players (MetroPCS) elsewhere.

That said, Verizon hasn't done anything with the spectrum because there aren't RF amplifiers necessary to do both lower and upper 700MHz bands. And the "A" block has ch 51 TV interference issues.

The only 700MHz band with open-access requirements is the Upper 700MHz "C" block. This is where Verizon is rolling out their LTE footprint now.

The lower 700MHz band (blocks A,B,C,D,E) do not have this restriction on them. Therefore, if Verizon gets rid of them, they aren't going to be ditching any open access requirement, just the 2013 build-out requirement. The "B" blocks will go to AT&T, and the "A" blocks to US Cellular where they have coverage, and to other minor players (MetroPCS) elsewhere.

That said, Verizon hasn't done anything with the spectrum because there aren't RF amplifiers necessary to do both lower and upper 700MHz bands. And the "A" block has ch 51 TV interference issues.

I feel like this country needs to be reminded en masse that this is a country for the people, by the people (no i'm not joking, it really is supposed to be that way in the US, despite what it looks like) and that the people are consumers who demand choice.

I agree, but in this case we don't even have to leverage "consumer" power. The electromagnetic spectrum is a textbook archetype of a public commons. Wireless service providers are using public property for private gain, and as such they have no right to expect exclusive access. We, the public, have put up with this attitude for far too long, and at great detriment to ourselves. It's time it stopped.

Isn't land similar to EM spectrum? Stake your claim, it's yours, just don't screw with the neighbor's property.

Quite simply, no, it's not. The rules for how any given chunk of spectrum can be used are actually quite strict. Spectrum management is actually so complicated and planned out that it's a dedicated career field in some branches of the US military (though admittedly we have to worry about it worldwide, not just in one country like the FCC).

It would be nice if Verizon built out using that lower 700Mhz since they would then have to have LTE devices which could use AT&T's LTE as well as Verizon. Right now, neither seem to be ordering handsets that would work in each other's bands. Is this just another way to keep the frequency divide?

Soo...at the end, all we've got is 'they haven't built out the 700Mhz spectrum because of possible interference with broadcast television'? That's not so sinister, but also not so convincing. Time to dig deeper.

Isn't land similar to EM spectrum? Stake your claim, it's yours, just don't screw with the neighbor's property.

Quite simply, no, it's not. The rules for how any given chunk of spectrum can be used are actually quite strict. Spectrum management is actually so complicated and planned out that it's a dedicated career field in some branches of the US military (though admittedly we have to worry about it worldwide, not just in one country like the FCC).

To be fair, it's a dedicated military career because the radio planners developed for tactical radios were so outrageously complicated that they require practically a college degree to operate.

Isn't land similar to EM spectrum? Stake your claim, it's yours, just don't screw with the neighbor's property.

Quite simply, no, it's not. The rules for how any given chunk of spectrum can be used are actually quite strict. Spectrum management is actually so complicated and planned out that it's a dedicated career field in some branches of the US military (though admittedly we have to worry about it worldwide, not just in one country like the FCC).

To be fair, it's a dedicated military career because the radio planners developed for tactical radios were so outrageously complicated that they require practically a college degree to operate.

Come on, it can't be as bad as IMDS, or FSM forbid, Remedy >_< lol (though I actually like IMDS... lol)